Why Fintech Solutions Are Key to the Future of Content Creators

The creator economy can indeed be considered a promising field. In only three years, it is projected to reach a $500 billion market. As the industry grows, fund turnover also increases. Content creators earn more yearly, catalyzing the need for fintech products that will meet their unique needs.

Startups can address this demand and create infrastructure tailored to the industry. Why startups? They are much more flexible than traditional institutions so can be a better fit. 

In this article, I will consider the gaps in the creators’ industry financial infrastructure and explain how fintechs can build the missing parts. 

The Blank Spaces of the Creators’ Economy

Problems with account opening and lending

First of all, even opening a bank account these days can be a nightmare. For content creators, it is even more challenging as they are mostly young and inexperienced. They might not fully understand what’s needed, and sometimes, even basic requirements can be hard to meet. 

What adds fuel to this fire is that banks have a lot of power and a lot of other, less risky client bases now, so they pretty much do what they want. For example, content creators are seen as high-risk clients due to the instability of their income, so traditional institutions can simply refuse in providing particular banking services, available to others.

Tax-related issues

VAT is another major headache because it’s heavily enforced but not always clear for digital content-makers. In some regions, digital content is exempt from VAT, in others—-it’s not. Some countries try to include these new industries in existing laws, but sometimes they aren’t always the right fit. Each country also handles its own regulations differently.

Then there are basic taxes, which most creators have little understanding of. They’re focused on doing what they love, not on tax rules. They often don’t think about it until it becomes a serious legal problem.

The high risk of fraudulent schemes

Fraud-related concerns are also something content creators have to watch out for. For example, if someone is only writing and not streaming, it's hard to tell who's behind the content or who is collecting money for whom. This opens the door for a range of problems—from hacking and having the profile copied to actual fraud, where someone could use one’s identity for illegal activities or simply steal the money.

How Fintech Companies Can Bridge the Gaps

Any industry has its own infrastructure in which it exists and develops—it is like an ecosystem that ensures growth. When an industry is young, its infrastructure is just beginning to take shape. This is also the case with the economy of creators at the current time. 

Moreover, classic financial solutions are not enough in the creator economy because the audience in this area is specific. That is why it is important for startups not just to offer standard products but to adapt them to the unique needs of creators to support their growth and development effectively.

To be precise, projects can develop new risk assessment models to integrate account opening and lending in the world of creators. Instead of traditional scoring, companies can analyze revenue streams from platforms like YouTube or Instagram. These platforms can also integrate directly with creators’ income sources, offering loans with conditions based on expected earnings.

Automatizing the legal issues might be quite challenging even for the most advanced fintechs. A possible solution is for fintech platforms to act as a marketplace that will connect creators with legal professionals who specialize in the industry. Obviously, there is room for improvement in this solution, but having easy access to experts or pre-built templates for common legal needs could save creators from some legal problems.

Fintechs can also use the databases of stolen data and fraud patterns to protect creators from falling victim to scammers. They can develop systems that detect fraudulent activities far before content creators realize that fraudsters have caught them. Incorporating such security features into payment systems will ensure a much safer experience for creators and save their funds and reputation. 

The Bright Future of Fintech for Creators

Whether it's access to credit, legal help, or fraud prevention, fintech companies have the potential to transform the financial infrastructure of the creator economy. Fintech products will scale their businesses and solve many issues that come along. 

As the creator industry will only grow, it will be a win-win for every party involved. The more promising startups and solutions appear, the faster the infrastructure is built and the better for the entire industry. Over time, thanks to this approach, the industry itself begins to flourish.